What is a Property Chain?01 Feb 2018
What is a property chain? A property chain is when a line of buyers and sellers are linked together due to each selling and buying a property from one of the others (except the people at the beginning and the end of the chain.)
A chain can vary in size depending on the number of buyers and sellers – it can be as little as 3 but can be in excess of 10. My longest chain I dealt with was 15!
It is not only the buyers and sellers involved, each property will usually have an estate agent, surveyor and a mortgage advisor all trying to push each sale through. If one of ‘The links’ forgets to sign a document, apply for the mortgage on time, cannot find paperwork e.g building warrant then the whole chain could be delayed and in the worst case scenario collapse.
When my friends are selling I always try to advise them that if they have a number of buyers interested it is not always best to go with the highest offer but with the buyer who is in a proceed-able position. What I mean by this is that the buyer is not selling, or his home is under offer to a buyer who is also proceed-able.
I think many sellers are just happy to have an offer on their home and don’t really think about who else is involved. Before the market crashed back in 2008 most buyers just got a bridging loan if they had not sold but that is not the case anymore and most sales are involved in some sort of chain.
Next week I will give a working example of the pitfalls of chains but in the meantime if you have any questions please let me know or comment.